To: Justa Werkenstiff who wrote (20633 ) 6/21/1998 10:31:00 PM From: akidron Read Replies (2) | Respond to
Sitting sipping some Brugal Rum, eating a bowl of sanchoco, watching the boats sail up and down the Ozama River.... It got me thinking.... Just how smart and instinctive Teri is..... Here we have these magnificent and sweeping statements on how GE has a bigger market cap than the whole South Korean Market.... And that is somehow supposed to be comforting... hey we can't have it both ways... we are amat investors because we think the future is painted in silicon, and then some of us belittle silicon economies... the fact is that GE's market cap is inflated... and that a great deal of Asian value is hidden because co's are run to maximise revenue and market share, but not profit. Further is is my opinion that this whole Yen rescue scheme is a fob to the chinese, so that Bill can come back with a few human rights.... Rubin said, before he was ambushed, that we would not support the yen.... Why??????... because supporting the yen is to delay the inevitable... that Japan's reccession is deep and ugly... and will cause it to be deeper and uglier still.... As for Amat in specific.... it is to me, inconcievable, given the economics of mass produced chips, and the latent bankruptcy of the Japanese banks, that anybody is ordering anything much from anybody making capital equip... because this industry is the sum total of all the excesses of supply, rather than demand, led production. Who is going to stand behind the note... does anybody seriously think that US and European banks are going to rush in to take the Japanese banks place... I can see it now... "Man, lets go and lend Samsung a billion to buy equipment so tha it can make more of a product that has a negative 30% gross margin,".... not even our blind bankers are going to fall for it.... Gotta stop now because I came here to rest... and I'm getting all excited, but tell u something that's interesting to me... in all the hype on the MU/TXN deal... perhaps the most obvious meaning has been lost... basically it waas financed by TXN... and the cost was 12% of MU's equity... CW says its a good deal for both... because TXN was never going to make money on Dram and MU, might one day... but if it was such a great deal... a bank would have sold some bonds to finance it and MU would have given up nada... but a bank couldn't sell any bonds... because there are no buyer's because it is plain that MU will run out of cash in nine months if the market for its products doesn't improve... I said before that last Q that AMAT would either warn, or manipulate the Q and revise the next lower... the same is true this time around, only this time they've already taken one charge, and I expect they'll take another (relating to Tiawan push-outs), and reduce the 4Q to break even... I expect visibility for 1999 to be non-existant, but that we'll get more of the ----- "when it turns around we're gonna be in the best place to exploit it" dirge.... of course it's true... but only if you got in at the right price....
